Trimming expenses when income is tight
LEXINGTON, Ky. (WTVQ) – Amid the Coronavirus pandemic, many people are trying to balance their budget and make ends meet. It can be especially tough right now if you’ve seen a reduction in income as you try to figure out where you need to trim.
Dr. Jennifer Hunter, an Extension Professor of Family Finance and Resource Management and Assistant Extension Director with UK’s Family and Consumer Sciences says it’s important to look at our finances right now, “What we don”t want to do is bury our head in the sand.”
Dr. Hunter says figuring out our flexible expenses versus fixed expenses is key.
“What is your rent or your mortgage payment or your car payment? Those are the dollars that we know go out every month but they’re also the ones we really can’t change quickly,” explained Dr. Hunter.
Then, there are flexible expenses like food or entertainment. Dr. Hunter says knowing the difference between those expenses will help you make better informed decisions.
“You want to know exactly how much income you have coming in,” said Dr. Hunter. “Then come up with a spending plan.”
Those flexible expenses like our cell phone plan, satellite subscription or streaming services can then be adjusted to where our income and our expenses balance.
Dr. Hunter suggests having that discussion with your spouse or partner along with your children, “When mom and dad start spending differently it’s important to explain why.”
A simple exercise Dr. Hunter says you can do with your family is to write down things you value and then build a spending plan around that, “Most of the time that’s going to be a safe home, providing food on the table.”
Dr. Hunter says that exercise helps relay what’s important to your family and can help get people together and ensure everyone is on the same page.
Trimming expenses when income is tight
Source: Dr. Jennifer Hunter
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